Insurer Zurich UK has published its socio-economic pay gap to help “chip away at the class ceiling” in the UK.
The employer’s median pay gap between employees from professional and lower socio-economic backgrounds is -4.2 percent. To find the gap, the employer analysed data from 73 percent of its 5,000-strong UK workforce. Its mean average pay gap is 10.5 percent.
Both of these measures are less than the figure revealed in research from the Social Mobility Foundation. It found that people from working-class backgrounds are paid 12 percent less in the UK than those from middle-class backgrounds despite being in the same professional occupations.
In the financial services sector specifically, almost nine in ten senior roles are held by people from higher socio-economic backgrounds. Across the UK working population only a third hold these senior roles. The foundation said that a person’s background is much more likely to impact their career progression in financial services than gender or ethnicity.
However, there are signs that this is improving across the finance industry. The proportion of senior roles occupied by people from lower socio-economic backgrounds increased from 26 percent to 28 percent year-on-year.
Proactive changes
Zurich UK is playing its part in the change, with one in five senior leaders at the insurer reporting that they are from lower socio-economic backgrounds. The employer’s ‘social capital’ programme supports new starters from non-corporate backgrounds to help them navigate the corporate environment and to boost inclusion.
The employer has also revised its recruitment processes by removing qualifications, such as university degrees, from entry level job adverts if they’re not required for the role. It has also introduced a more skills-based approach to hiring. The aim is to remove barriers that can exclude candidates that have had less access to opportunities such as work experience or higher education.
Zurich’s UK workforce is more socio-economically diverse than the wider financial sector. It is made up of 28 percent from professional backgrounds, 10 percent from intermediate backgrounds and 23 percent from lower socio-economic backgrounds. In comparison, Social Mobility Commission research showed that the split for the whole financial services workforce is 45 percent from a professional background, 21 percent intermediate and 34 percent from a lower socio-economic background.
Steve Collinson, chief HR officer at Zurich UK, said: “Today’s announcement represents a firm commitment from us to understand and implement social equity drivers within our organisation. Sharing these pay gaps, alongside the measures implemented to enable social mobility, is a great way to shine a light on what is currently the best kept secret in DEI; social mobility is the linchpin of shifting the dial on multiple diversity characteristics.
“Whilst ‘chipping away’ at the class ceiling is certainly a step in the right direction, smashing it is the ultimate goal. Social mobility is the next step in achieving a truly diverse workplace and I’m proud to say that at Zurich, your socio-economic start in life doesn’t determine your future career.”
The employer has championed a number of other initiatives to support career progression and remove barriers to those from lower socio-economic backgrounds.
These include a social mobility ambassadors’ group, donating smart interview clothes to Suited & Booted London, awareness training for leaders, internal mobility and up-skilling opportunities, and sharing data with the Bridge Group/Progress Together data report, which is conducting the largest study into socio-economic diversity and progression in financial services.
Sarah Atkinson, CEO of Social Mobility Foundation, said: “It’s great to see companies like Zurich UK taking the lead by voluntarily publishing their socio-economic pay gap and taking steps to ensure that your background doesn’t determine your pay or career progression. We hope this will encourage more employers to act on social mobility, including by taking part in our Social Mobility Employer Index.
“No matter your background, being fairly rewarded for your work is what we all expect. But our research shows that in professional occupations people from working-class backgrounds are paid less than their peers from higher socio-economic backgrounds – effectively working one in eight days for free. This is holding both brilliant people and the UK economy back.
“The upcoming Equality (Race and Disability) Bill plans to make ethnicity and disability pay gap reporting compulsory for all large employers. We’re calling on the government to introduce mandatory socio-economic background reporting at the same time. This small change could make a huge difference to our understanding of the barriers to opportunity, meaning we can then break them down.”
